ANCHORAGE, Alaska (KTUU) – Alaska Native leaders and members of Congress are pushing back after Defense Secretary Pete Hegseth sharply criticized 8(a) contracts, calling them a vehicle for “DEI” and alleging some companies profit by passing work to others.
“Today we will examine this Small Business Administration’s Native 8(a) program and the role that it plays in economic self-determination of our Native communities. This isn’t a new topic for oversight,” Sen. Lisa Murkowski said. “We have regularly conducted oversight of this program. And that remains important because 8(a), in this senator’s view, is a success story. It’s not a fraud, as some have mistakenly alleged and quite honestly, that’s terminology that I would just categorically reject. This program may not be well understood, which may be part of our challenge here.”
8(a) Business Development Program are overseen by the Small Business Administration. Started in 1971, the Alaska Native Claims Settlement Act then created Native Corporations to manage land and money, allowing advantages in the SBA 8(a) contracts.
These programs are often a critical part of the business portfolios for many Alaska Native corporations because of the Alaska Native Claims Settlement Act which was created to benefit tribal members holding shares in the companies.
But, Defense Secretary Pete Hegseth says many of these programs are “swamp code words for DEI, race based contacts,” and that what happens often is that one company will take a fee off the top of a contract and pass the work off to another company. Hegseth called this practice “Beltway Bandits.”
“We’re actually taking a sledgehammer to the oldest DEI program in the federal government,” Hegseth said in a video posted to social media on Jan. 16.
This week, Murkowski, Chairman of the Senate Committee on Indian Affairs, held an oversight hearing in Washington D.C. called: “Economic Self-Determination in Action: Examining the Small Business Administration Native 8(a) Program.”
Speaking before lawmakers were corporate leaders for Alaska Native, Hawaiʻi and Cherokee Nation.
“We’re seeing this heightened scrutiny,” Murkowski said. “The public attention, the media attention to the 8A program, and again, I think that there’s just a lot of misconception out there about how it really works.”
Hegseth said 8(a) contracts will go through a “line-by-line,” review of small business sole source contracts over $20 million.
“8(a) refers to the small business administration program to assist, quote, ‘small, disadvantaged businesses owned by a socially disadvantaged individual or tribe,’” Hegseth said.
“If a contract doesn’t make us more lethal, it’s gone. We have no room in our budget for wasteful DEI contracts that don’t help us win wars,” he said in the video. “Second, we’re doing away with these pass-through schemes. We’ll make sure that every small business getting a contract is the one actually doing the work.”
Lawmakers who represent state’s that utilize 8(a) strongly disagreed with the way Hegseth depicted the program.
“If there are bad actors in this program, they should be thoroughly investigated and held accountable, just as they should be in any federal program,” Senator Brian Schatz, D-Hawaiʻi, said. “But calling for a blanket pause on all Native 8(a) contracts, or even an end to the entire program because of allegations of wrongdoing by a few is not fair and it is not effective.”
Katherine Carlton, the president of Chugach Alaska Corporation, said her corporation delivered $32.6 million in community and shareholder benefits last year. She said that benefited education, workforce training, cultural preservation and economic stability in rural Alaska.
“This work is awarded not by preference, but because of our proven performance, cost discipline, and reliability under strict oversight,” Carlton said. “The 8(a) program gives federal agencies lawful, accountable options when urgency and efficiency matter. In practice, sole source 8A awards often execute in 30 to 60 days, compared to 12 to 18 months for traditional procurement, reducing administrative cost, overhead, and mission delay. Sole source authority is often misunderstood, but it isn’t a shortcut or a loophole.”
Copyright 2026 KTUU. All rights reserved.